| The growing strand of political economic scientific literature is devoted to the US innovation system recently yielding a declining payoff. In this paper I show that the US federal government's (that I assume to be the mainstay of basic research) long-term investments into fundamental science possess an enormous positive impact on the country's capacity to produce innovations that by definition is a highly risky and long-term task being discouraging for private business. Therefore, both the 50-year decrease in the federal support for R&D along with the lack of the governmental encouragement mechanisms for students (less federal grants, less university seats, lower salaries, worsening standards of high school preparation for S&E degrees etc.) to choose S&E professions seems to be a powerful explanatory mechanism for why the US is losing its competitiveness in the world innovation market. The preliminary regression analysis lends support to the theory outlined above. |
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